A recent Bloomberg article spoke to this question, claiming that former Nokia CEO Stephen Elop, widely perceived as a frontrunner for Ballmer's job, would consider jettisoning Xbox and Bing if he is selected to lead. The article cited unnamed sources close to Elop, but even if he is less trigger happy than implied, Microsoft's consumer efforts face scrutiny from others as well.

Nonetheless, it's a foregone conclusion that Microsoft will continue to target at least some consumer markets; otherwise, it wouldn't have purchased Nokia's device business. But it's one thing for Microsoft to get serious about smartphones; they're the gateway to end users, and Microsoft's hand was somewhat forced because no one besides Nokia was wholeheartedly supporting Windows Phone 8 in the first place. It's something else for Microsoft to invest billions in Surface tablets, Bing and the Xbox -- the first two have lost more than they've earned, and the Xbox eats up resources that might be better spent on Windows, Office, Azure or other more profitable products.

The Xbox One

To be sure, the $499 Xbox One brings a lot to the table, perhaps enough to justify its $100 premium over the PlayStation 4. Its headline features include a next-generation Kinect sensor that can not only identify individual users, but also track a gamer's heartbeat during fitness games. It supports not only cable television, but also a number of video services, including Netflix and Hulu; can connect to the Web via Internet Explorer; and even supports multi-tasking for, say, watching a basketball game on one side of the screen while viewing an app with your fantasy league statistics in the other.

There's more. The Xbox One also obeys voice commands, has the cross-platform games you'd expect, and will boast a library of interactive titles once Microsoft finishes building them. Depending on your taste, you might also care about its exclusive games, such as Forza Motorsport 5 and Dead Rising 3.

Early reviews indicate the Xbox One doesn't get everything right, but as a grab at living room domination, it's as good as anything in the market -- which is to say, good enough to be intriguing, but not good enough to be an iPhone-level disruptive force. Research firm Gartner projects the video game market will be worth $111 billion by 2015, a 19% increase over this year, so if the Xbox One expands on the Xbox 360's reach, the spoils could be substantial.

If Microsoft's plan plays out, those spoils will extend outside the pure video game market, however. The Xbox hooks into Microsoft's cloud services such as Skype and SkyDrive, and its interface looks more like Windows 8's Start screen than ever. Under "One Microsoft," this synergy is designed to turn Xbox sales into subscriptions for Microsoft's cloud services, or, better yet, higher adoption of Windows 8 devices. If it works, Ballmer's interest in consumers could be vindicated. But if the Xbox One can't appeal to more than a core gaming audience, incensed investors will start circling.

Microsoft director John Thompson, who leads the CEO selection committee, has repeatedly stated that the company's next CEO will use the blueprint Ballmer has already established. But you wouldn't expect him to say anything else; otherwise, he'd be dooming products like the Surface Pro 2 and the Xbox One before they'd even had a chance.

If the Xbox evolves into a dominant media hub, it will have to grow from a gamer base, but it's not yet clear if the majority of gamers will go with Microsoft or Sony.

Apple and Google already dominate gaming, and media consumption in general, on mobile devices. Both are also experimenting with ways to expand their grasp to televisions. Microsoft and Sony are essentially trying to infiltrate the living room from one end, if one other words, but even if Microsoft prevails, it might find a Siri-equipped iTV or some future iteration of Chromecast waiting for it on the other.

There's no single migration path to the next generation of enterprise communications and collaboration systems and services, and Enterprise Connect delivers what you need to evaluate all the options. Register today and learn about the full range of platforms, services, and applications that comprise modern communications and collaboration systems. Register with code MPIWK and save $200 on the entire event and Tuesday-Thursday conference passes or for a Free Expo pass. It happens in Orlando, Fla., March 17-19.

I've recently read another article that states that Microsoft has lost at least &2 billion this year in the entertainment portion of the new division it's in. I'm not surprised. Microsoft has lost over $12 billion in their entertainment division since the first XBox, with no clear path to stem those massive losses.
No wonder Elop would get rid of it. I've been following this for years. No matter how many times Microsoft attempts to conceal those losses by merging something profitable into that division (first the small Devices division! and now profits from Android licensing), the losses can be separated out.
Even Bing may be in trouble. I'm wondering when the Feds and the EU will realize that it's almost impossible, if not actually impossible, to remove bing from the Modern UI, and replace it with, say, Google. Or remove IE.
Once that's understood, we could have another few years of lawsuits. I'm surprised that Google and others aren't already on top of this.

If chipsets were the only things that mattered to gamers, the Atari Jaguar and the TurboGrafx 16 would have been far more successful.

Other than the actual technology, gamers also care about the games available (they are not always the same, even today where some games have multiple releases, because of licensing issues; console manufacturers understand that this is where the real money is made), backwards compatibility, controls, networks, and much more.

Pursuing consumers has certainly worked for Apple as a way of leveraging the same technology in the enterprise. One can certainly think of non-consumer applications for the Xbox and its attendant technology if one thinks about it (for instance, long-distance surgery/training).

I didn't intend any direct comparison between the Xbox One and an iPhone. Comparing them in an apples-to-apples way would be silly, as you imply.

The point is that Apple, Microsoft, Google, Sony and others don't just make single products; they each make a range of products that comprise an ecosystem. The ecosystem is what matters in this context, not the individual product. Can the Xbox One be the foundation for an ecosystem that appeals to not only gamers but virtually everyone with a living room? Can iOS/Apple's developer community/Apple TV serve as the foundation for a similar living room play?

Apple has a great ecosystem, and if they try to take over the living room, the ecosystem will be central to doing so. Microsoft is also pitching its living room play around not only the Xbox One, but also itS surrounding ecosystem-- Skype, SkyDrive, IE, etc. Microsoft's ecosystem is different from Apple's in many ways, and each company is taking a different tactic in deploying it. As I mention in the article, Microsoft is charging into the living room via gamers, whereas Apple is taking a different path. This article never makes the argument that an iPhone will take over the living room. Rather, it makes the argument that Microsoft and Sony are entering the living room from a certain angle (i.e. gamers) and that even if Microsoft bests Sony, it might find other formidable challengers coming from other angles (e.g. Google/Apple/Whoever, coming at the living room with a content/UI-centric model, rather than a gaming one).

Put another way, the point isn't whether Microsoft can win over gamers. Gamers are an important part of any "living room domindation" fight-- but winning the gamers doesn't win the larger war. Rather, the point is whether Microsoft can use gamers as a base from which to expand. Likewise, the point isn't that an iPhone can be compared to an Xbox; the point is whether Apple can use its iOS base to build a TV-centric ecosystem that's equally popular and useful.

As has been stated in the article & comments, the console game market is low profit margin & quite limited in growth. Thus, this is not a market that Apple has any interest in moving on. Apple did make an attempt to enter this market back in the late 90's & it was a complete failure. Problem is, it requires so many resources, because you have to have a cutting edge hardware, OS & then drive a developer base, it is too costly. Apple is better off using those resources on their computers & portable devices, where they have a high profit margin as well

To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.

Chances are your organization is adopting cloud computing in one way or another -- or in multiple ways. Understanding the skills you need and how cloud affects IT operations and networking will help you adapt.